Risks tied to trade rules and infrastructure still weigh on confidence
Alberta’s economy is on track to post the strongest GDP growth in Canada this year, according to a quarterly economic outlook released by ATB Financial, even as the Iran war and looming trade negotiations cloud the broader national picture.
ATB Economics projects Alberta’s real GDP will expand by 2.6% in 2026 — up from a December forecast of 2.1% made before the Iran war began — compared with national growth of just 0.8%. The province is forecast to grow 2.4% in 2027.
“Alberta is moving like a fast car restricted to the slow lane,” said Mark Parsons, ATB Financial’s vice-president and chief economist. “The momentum is clear, with Alberta leading in job gains and consumer activity. However, the trade conflict, ongoing cost of living pressures, and transportation infrastructure constraints are keeping the province from hitting top gear.”
Oil prices lift revenues, but capital discipline holds
The conflict in Iran and the closure of the Strait of Hormuz have pushed ATB’s West Texas Intermediate (WTI) price forecast to an average of US$84/bbl for 2026, up sharply from US$61 in the December forecast. Alberta’s nominal GDP is expected to rise 8.8% this year as a result.
Despite the revenue windfall, energy producers remain in a “wait and see” posture on major capital expenditures, citing uncertainty over additional oil transportation capacity and the temporary nature of elevated prices. The WTI price is forecast to retreat to an average of US$70/bbl in 2027 once the Strait of Hormuz is assumed to have reopened.
Pipeline uncertainty caps upside
The energy sector’s caution is partly tied to unresolved pipeline questions, including a proposed new oil pipeline to the British Columbia coast under the Canada-Alberta memorandum of understanding. ATB’s modelling suggests major pipeline expansions combined with the Pathways carbon capture project could add an average of 5.1% to Alberta’s real GDP between 2027 and 2035, though those outcomes have not been built into the base case forecast.
Population growth sustains consumer activity
Alberta continues to attract new residents, albeit at a slower pace than recent years, with population projected to grow 1.1% by July 1, 2026. That demographic momentum is flowing through to retail and construction activity. Alberta leads all provinces in retail sales growth, with annual growth projected at 4.5% for 2026. Employment is forecast to grow 3.3%, with the unemployment rate declining to an annual average of 6.6%.
Household strain and trade risks remain
The report cautions that headline growth figures do not reflect the experience of all Albertans. Many households remain under financial pressure from elevated living costs, while the youth unemployment rate remains above its historical norm. Business hiring intentions are also constrained by uncertainty ahead of the CUSMA review this summer.
“The top-line numbers tell a story of provincial economic resilience, but the day-to-day reality is that not everyone will feel the benefits,” Parsons said. “Surging fuel and input costs are squeezing both family and business budgets.”
Alberta carries the lowest effective US tariff rate of any province at 1.5% of merchandise imports as of March 2026, compared with a national average of 6.7%. ATB’s base case assumes the CUSMA review preserves the existing exemption for CUSMA-compliant goods, though a breakdown of that exemption is identified as a key downside risk.
The report also flags the upcoming provincial referendum on separation as a factor to monitor, noting that the Alberta Chambers of Commerce found half of Alberta businesses consider it a top issue already affecting the economy. ATB’s forecast assumes a status quo result in line with recent polling.
At the national level, Canada’s real GDP is projected to grow just 0.8% in 2026, held back by trade uncertainty, weak business investment, and stagnating population growth.
